New guidelines proposed to protect consumers using e-payments

SINGAPORE: It may soon be easier for consumers and small businesses to get their money back if fraud or mistakes occur when electronic payments (e-payments) are made.

On Tuesday (Feb 13), the Monetary Authority of Singapore (MAS) proposed new guidelines for financial institutions to protect the interests of users in such situations.

“The proposed E-payments User Protection Guidelines aim to encourage wider adoption of e-payments by setting standards on the responsibilities of financial institutions and e-payment users,” MAS said in its media release.

A public consultation ending on Mar 16 has also been launched to gather feedback from consumers and industry players, with plans for the proposal to kick in within the first half of the year.

Currently, there are no standardised industry guidelines spelling out what consumers are liable for in the event e-payment transactions are wrongfully made.

Banks typically have their own processes to follow in these situations.

The central bank’s proposed guidelines spell out the losses which users, covering individuals and micro-enterprises, are expected to shoulder when e-payment transactions go wrong.

In the event of unauthorised transactions, if users are found to have taken full care to protect their accounts, they are considered not liable for any loss and should be compensated in full.

Where users are found to be partially responsible for unauthorised transactions by being negligent but not reckless, they are liable for up to S$100 of their losses and are expected to be compensated for remaining amounts above that.

However, where users are found to be the primary cause of their losses due to recklessness, they are expected to be fully liable for what they lose, with no compensation on the cards.

The guidelines spell out duties of users like the need for them to not voluntarily disclose access codes to third parties, to keep records in secure locations, and to use strong passwords for their accounts.

Financial institutions will assess if users have been diligent, negligent or reckless in carrying out these duties when unauthorised transactions happen.

Accounts that can hold a balance of more than S$500 and are operated by banks, credit card firms or finance companies are covered under the guidelines. These include bank accounts linked to e-payment platforms like PayNow, NETS, debit and credit cards.

The guidelines do not cover stored value cards that hold a limited value like EZ-Link cards and CashCards.

In addition, if users accidentally send money to a wrong account, the guidelines say that financial institutions and fund recipients should take steps to return what was sent. Recipients will be informed that it is an offence to retain money that they are not entitled to.